TaxTMI 
TaxTMI 
2011 (7) TMI 649
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....small tin containers. The period of dispute is from August 1994 to November 1996. Till 12/09/95, the units were covered by a single registration with the department. With effect from 12/09/95, the blending unit alone was retained in the registration certificate; the other unit was separated and given separate registration as dealer/depot. During the entire period, the activity of IOCL consisted of blending and sending the blended product in bulk from the blending unit to the other unit, packing it in small containers in the latter unit and marketing the final product. The small tin containers required for this purpose were received directly in the packing unit from the manufacturers thereof and these were used as input and MODVA....
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....ssible modvat credit for the period September 95 to November 96 to the extent of Rs.1,74,13,087/-. I appropriate the same for the Government and further direct the assessee to pay the remaining credit of Rs.72,71,372/- availed of during the period August 94 to August 95. The assessee should also pay the appropriate interest on such inadmissible modvat credit under Rule 57I (5) w.e.f 28/09/1996. I impose mandatory penalty under Rule 57I(4) equal to the modvat credit availed of by the assessee during the period 28/09/1996 to 30/11/1996. However, I refrain from imposing the penalty under Rule 173Q". 2. As is indicated by the impugned order, the assessee had reversed MODVAT credit to the extent of Rs.1,74,13,087/- for the per....
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....t was not open to the department to deny MODVAT credit of the duty paid on the containers to IOCL for the period upto 12/09/95. For the subsequent period also the learned Counsel has endeavoured to make out a case for the assessee by submitting that the packing unit registered as depot was entitled to complete the manufacturing process in the depot, which should be treated as an extension of the factory. In any case, it is submitted, the cost of packing was also included in the assessable value of the marketable final product and duty was paid thereon. In this scenario, with reference to the provisions of Rule 57A of the Central Excise Rules, 1944, the learned Counsel submits that MODVAT credit of the duty paid on containers could not....
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....ntitled to avail MODVAT credit of the duty paid on any input received on the packing unit. Referring to the assessee's plea of limitation, Ld. SDR claims support from certain decisions, viz., CCE, Surat-I Vs. Neminath Fabrics Pvt Ltd., 2010 (256) ELT 369 (Guj), CCE, Jalandhar Vs. Vardhaman India Products, 2009 (236) ELT 637 (P&H), etc. 8. In his rejoinder, the learned Counsel once again refers to his case on merits and submits that, during the material period, the relevant rules as interpreted by the Hon'ble Supreme Court did not require that inputs be directly received in the factory. In this connection, he has relied on Jaypee Rewa Cement Vs. CCE, MP, 2001 (133) ELT 3 (SC), Vikram Cement Vs. CCE, Indore, 2006 (194) ELT....
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....vailment of MODVAT credit. In the case of Vikram Cement, it was held to the same effect with reference to Rule 57AB, for the period from 01/04/2000, the date on which the rule came into force In the cases considered by the apex Court, the inputs were used in a part of the manufacturing process, which was carried out outside the factory. In the instant case, it is not in dispute that, during the period from 12/09/95 also, the assessee paid duty of excise on their final marketable product on the basis of assessable value determined by including the cost of packing. In other words, the packing activity was treated as part of the manufacture of the finished product and the same fact was acknowledged by the Revenue, which....